Would Justin Welby be embarrassed to own shares in my bank?

The financial sector as a whole isn't the most salubrious industry to be in.

Last month, I took out a loan that had an effective APR of 243,333 per cent. But I didn't go to a payday lender to do it. Although the worst of them do offer loans with interest rates in the hundred thousands, a more typical cost of a payday loan is something like Wonga, which cites a representative APR of 5,853 per cent on its website.

No, instead, I took out an authorised overdraft at my bank. I didn't mean to, you understand; a Kickstarter project I'd backed finished, and charged me about £15. The email was caught by a spam filter, and I'd forgotten it was coming, so my mental accounting was thrown out of whack. By the time I found out, I'd been overdrawn by 17p for two days. For that privilege, my bank charged me the princely sum of £2.

Just for comparison, Wonga themselves, the arch-villain of the day, would have charged me a third of a penny, if they did loans that small, though their handling fee would have been much larger.

In my defence, I'm not an entirely ignorant consumer. The bank account I have does have punitively high interest rates if you go slightly overdrawn, but at the same time, it pays me money for being in credit (something you won't find all that frequently these days). When I'm not an idiot, the two balance out to leave me slightly better off.

But it does leave me wondering at how we pick which companies are evil. Justin Welby, the archbishop of Canterbury, today says he is "embarrassed" to discover that the Church has a financial stake in Wonga. On a scale of one to ten, his embarrassment ranks "about eight", apparently. But where would an investment in my bank rank? Or is a bank a respectable institution, above criticism, even when the numbers involved tell a different story?

Part of the answer is that the numbers involved don't, in fact, tell the whole story. Quoting the interest rate for my bank is misleading: a better way of phrasing it is to say "I am charged £1 for every day I have an authorised overdraft between £0 and £500". The only reason why my effective APR was so high is because the amount I "borrowed" was so low. But for payday lenders, there's also other ways to phrase it which are less misleading. Wonga, for instance, charges interest of one per cent for every day the loan is taken out, plus a flat handling fee.

But there's also a question of business practices. It's fair to say that advising students to take out a payday loan instead of a student loan, for instance, is not particularly ethical. But then, neither is systematically selling insurance to people who don't need it and will never be able to claim on it, or lying about how much lending costs you in order to boost your profits. It's the financial sector as a whole which could do with a healthy dose of ethics, it seems.

A sign outside a 'Speedy Cash' cash loans shop on Brixton High Street. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.